Strategic partnerships are all around us. If one were to stretch a strategic partnership the overall business entity would be very close to a monopoly. Say you want to shore-up your supply chain, one aspect is to enter into a strategic partnership with those organizations that supply you with materials. On the other hand, a supplier would want to enter into a strategic partnership to supply components for a larger manufacturing organization.

In order for a strategic partnership to work, both parties need to derive benefit from the arrangement and the arrangement must be legal and ethical. The school yard bully and students would not be a strategic partnership. The school yard bully may offer students protection from other bullies in return for student tribute; however, the arrangement is not ethical.

We see some large organizations try to form strategic partnerships. Many of the partnerships are beneficial for all parties, like a telecommunication organization entering into a partnership with customers (signing customers to a contract for low service fees) and fiber optic cable makers (who are guaranteed to sell x amount of feet of cabling). Each party, telecommunication organization-to-fiber optic cable maker (b2b) and telecommunication organization-to-customer (b2c) derive benefits from the strategic partnership.

Another strategic partnership is market based. In order to sell product in another country organizations will enter into a strategic partnership with an organization already existing in the country. The benefit derived is that the product manufacturer has access to the market while the broker has access to the superior product the manufacturer is producing. The broker will also secure contracts in the country for the amount of product the manufacturer needs to produce and ship to the country.

Strategic partnerships are all around us and not necessarily bad. We need to examine strategic partnerships in order to understand why organizations increase sales and flourish while other organization do not flourish. An organization may have the best product; however, without strategic partnerships customers will never know about the product.

Enjoy,

Mike Kniaziewicz, MIS